Economic lessons from Japan: enhance the social safety net now

Imagine relying on your employer for housing as a critical part of your benefits package — and then facing layoffs amidst mounting national unemployment.

Koji Hirano and other Canon workers don’t have to imagine. The topic of a chilling New York Times story over the weekend, Hirano and other workers digital camera plant were told their services were no longer required. Given the meager cash reserves many Canon workers had on hand, losing that job and the attendant benefits would result in near-certain homelessness. “They were going to kick us out into the winter cold to die,” Hirano told the Times.

That’s not all:

To make matters worse, they can expect little in the way of unemployment or welfare benefits. In Japan, a country with little experience of widespread unemployment until recently, there is an inadequate safety net for laid-off workers.

This story highlights another essential lesson: when hard times loom, plan accordingly. Don’t let hard-working people be cast out in the street. Fund unemployment insurance, food stamps and other public benefits that will stimulate the economy — but more importantly, will take care of people in time of crisis.

Economies aren’t just about numbers. They’re about real people, and the real human consequences of economic dislocation. It’s easy to get numb when you see headlines about 10s of thousands of jobs being lost, to get bogged down in the sheer size of that statistic. But it’s important to remember that every job loss has a human story.

Not everyone who loses their job is going to have a story like Koji Hirano’s. Some will, though, and one story like that is one too many.